LONDON (Reuters) – China’s new digital currency, the e-CNY, is being used to make 2 million yuan ($315,761) or more of payments a day in its latest pilot at the Beijing Winter Olympics, a top official from the Chinese central bank PBOC has said.
While the Bahamas already has a fully functioning digital currency, China’s sheer size means that its attempt to develop a central bank digital currency (CBDC) is being closely watched.
Its latest trial is notable for the number of people attending the Games, and the fact that athletes, coaches and media from around the world can all use it via smartphone apps, physical payment cards or wristbands.
“I have rough idea that (there are) several, or a couple of million RMB (yuan) of payments every day, but I don’t have exact numbers yet,” Mu Changchun, director-general of the PBOC’s Digital Currency Research Institute, said during a webinar arranged by the Atlantic Council.
He said there was also no breakdown yet of the share of transactions being made by Chinese nationals and international attendees, although some clear trends had emerged.
“It seems all the foreign users are using hardware wallets,” Mu said, referring to the e-CNY payment cards, which look like credit cards without the normal chip and magnetic strip. “The software wallets are mainly used by the domestic users.”
A state-controlled commercial bank, Bank of China, has set up a number of special automatic teller machines (ATMs) at some central venues at the Games, inside the “closed loop” of teams, officials and organisers.
Foreign currency banknotes can be inserted into them and converted into either e-CNY or normal yuan banknotes.
The e-CNY’s availability at the Games has attracted some concerns about cybersecurity and data protection, however.
US Republican Senator and Vice Chairman of the Senate Select Committee on Intelligence Marco Rubio sent a letter to President Joe Biden’s administration last month asking what steps were being taken to ensure athletes were protected from “surveillance and manipulation”, labelling the digital yuan a “tremendous security threat to individual users”.
One of Britain’s spy chiefs, Jeremy Fleming, also said in an interview with the Financial Times in December that, although digital currencies presented a great opportunity to democratize payment systems, the technology could allow Beijing to monitor users and exert control over global transactions.
The PBOC, which oversees the e-CNY, says it attaches great importance to the protection of personal information.
PBOC governor Yi Gang said in November that the bank collects information on a “minimum and necessary” basis in e-CNY applications, and strictly controls the storage and usage of personal information. ($1 = 6.3375 Chinese yuan renminbi)
($1 = 6.3339 Chinese yuan renminbi)
(By Marc Jones; Reporting by Marc Jones; Editing by Kevin Liffey)